Colorado officials and Philip Morris International on Tuesday announced plans to build a nicotine pouch manufacturing facility in Aurora, which they said would bring $600 million in investment to the area.    

The new facility is expected to create 500 direct jobs in coming years and produce an annual economic impact of $550 million for the area, according to a news release from the company. 

The investment is part of PMI’s big bet on a product called Zyn, an oral pouch that contains nicotine powder and flavorings, such as mint, coffee and citrus. The pouches are the fastest-growing segment of the tobacco industry, which has struggled for decades to replace falling cigarette sales.

It doesn’t contain tobacco but U.S. regulators still treat it as a tobacco product, which PMI markets to adult users. 

Federal regulators and experts have long warned that no tobacco product — including nicotine pouches or gels — is safe, and nicotine is highly addictive. The Federal Drug Administration has also acknowledged that the health risks for different products “exist on a spectrum.” 

Company officials touted the planned Aurora facility as creating jobs and benefitting the economy, as well as promoting a “smoke-free future,” adding it will meet a “growing global demand” for such products. PMI said it was drawn by the area’s workforce and wants support for permitting and expedited construction.

State and local officials lauded the company’s decision to pick Aurora.  

Colorado Gov. Jared Polis said the facility will help “make Colorado the very best state to do business.”

Stacey Kennedy, CEO of PMI’s U.S. business, said Tuesday that company officials chose Aurora for its “diverse skilled workforce.” 

“This is not just a financial commitment, but it’s really a testament to our belief in our powerful mission and our belief in our scientifically substantiated products,” Kennedy said. “It’s also a testament to the potential of this community and the state of Colorado.”

PMI bought Swedish Match, the producer of Zyn nicotine products, in late 2022. Swedish Match controls nearly half the world’s share of both the nicotine pouch and “snus” markets. It is also the fourth largest producer of U.S.-style moist snuff, a category that is led by Altria, according to Euromonitor.

In November, Colorado approved $4.6 million in incentives over eight years under the code name “Project Waterfall” to PMI if it chose to build an Aurora facility and added 500 jobs to the area. The incentives come in the form of tax credits that the company will accrue once the jobs are created.

North Florida and Texas’ I-35 corridor, which connects Austin and Dallas, were also in contention before the company decided to build the facility in Colorado.

The Colorado Economic Development Commission said Aurora will be the company’s main facility for global production.  

Aurora is one of several municipalities that are part of the Colorado Aerotropolis, a decade-long urban planning initiative that seeks to establish an industrial and commercial business corridor around Denver International Airport. As the airport has grown into a large international hub, local leaders are betting on companies to tap into the global supply network.

Last month, leaders called on businesses to begin developing the miles of empty plains around DIA. Economic Development Commission representatives said in November that the project would support Colorado’s goals in boosting jobs and in showcasing the Front Range region as an attractive destination for global distribution hubs.

Aurora Mayor Mike Coffman said PMI is making a “significant investment” in the city. 

“This project will generate millions of dollars in tax revenue annually to our city, county and state,” Coffman said. 

Adams County Commissioner Eva Henry called it a “game changer for our community.” 

“This facility will not only create numerous jobs and opportunities, but will also generate millions of dollars in economic activities significantly boosting our local economy,” Henry said. “We are filled with anticipation and optimism about the future.”

PMI plans to break ground on the facility later this year and begin preliminary operations by the end of next year, with regular production starting in 2026, according to the release. Its construction is expected to create about 5,000 jobs and $1 billion in total economic impact, a company news release said. Officials confirmed that the new plant will be located on 150 acres in the northeast quadrant of the future 48th Avenue and Harvest Road intersection.

The jobs at the site will include engineers, production staff, technicians and quality control, said the company, which added that the average salary of the new jobs would be $90,000.

In 2008, PMI was spun off from Altria, the parent company of Philip Morris USA, which manufactures Marlboro. Philip Morris USA was one of the “Big Tobacco” companies that faced intense scrutiny decades ago as the connection between lung cancer and tobacco became more evident and concerns mounted over marketing campaigns geared toward children.

During a congressional hearing in 1994, the top executives of seven tobacco companies, including Philip Morris USA, testified that “nicotine is not addictive.”  

In 1998, attorneys general and the biggest tobacco companies reached a settlement to severely limit advertising of tobacco products, such as not using cartoon imagery or barring paid placements of their products in movies or TV shows.

And as federal regulators and officials aggressively warned consumers about the effects of smoking, the tobacco industry shifted to alternatives.

Zyn is one of the biggest drivers of business for PMI — specifically in the U.S.

The company saw its revenues go up nearly 15% in the Americas during the first quarter this year because of Zyn’s growing popularity across the country, according to PMI’s financial report filed in April.

Shipments of Zyn in the U.S. grew nearly 80% during the first quarter of 2024 compared to the same period in 2023.

PMI has heavily invested in Zyn, nicotine patches without tobacco, and its heatless tobacco device IQOS as it seeks to grow as a “smoke-free” company. Health experts have urged against the FDA’s approval for the company’s IQOS, alleging such products do not have fewer risks than cigarettes, according to a letter to the FDA first reported by Reuters.

Truth Initiative, a public health advocacy group born out of the 1998 settlement, urged the FDA to ban Zyn due to its high nicotine concentration that could lead to addiction, despite it being marketed as a product that could reduce dependency on tobacco.

The group also warned that the product is being marketed to underage consumers with its assortment of flavors.

Flavored cigarettes, tobacco and nicotine products have been the focus of intense legislative fights at the state Capitol. This year, a push to allow Colorado counties to regulate or prohibit them went nowhere. 

Outside of legislation, attorneys general have gone after Juul Labs, suing the vaping company for targeting young customers through marketing and misrepresenting the health risks of product usage. Juul Labs agreed to pay nearly $440 million to settle the two-year investigation by 33 states into the marketing of its high-nicotine vaping products, which have long been blamed for sparking a national surge in teen vaping.

PMI officials said they are “committed” to responsible marketing when it comes to of-age consumption. The company said it does not use social media influencers in the U.S. or people under age 35 in marketing material. Officials also said the company uses age-verification systems to direct digital advertising to people over 21. 

There’s little research on the long-term effects of nicotine pouches.